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Monkey See, Monkee Do

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Why can't these critters just learn to get along so we can enjoy the holidays?

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Here we come, walkin' down the street
We get the funniest looks from everyone we meet
Hey, hey we're the Monkees and people say we monkey around
But we're to busy singing to put anybody down


(Monkees)

The street is alive with the sound of analysts and many of them seemed to wake up on the wrong side of the bed this morning. When I walked into my office at six, J.J was excitedly mumbling something about something that I couldn't quite decipher. Bucky, who toggles between being an option trader and an interpreter, walked in shortly after to clarify the situation. Morgan Stanley downgraded AOL and reduced their weighting in the semis, semicaps, hardware and computer services sector. Not to be outdone, Deutsche Bank downgraded FNDY and JNPR and lowered their weighting in the analog space (ADI, LLTC, MXIM). Somebody wake up Mortimer!

Last night, while I was having a romantic moment with my Bloomberg terminal, I pulled up a six month chart of the NDX and almost splotched. The tech-laden index was sitting directly on the trendline drawn from October's lows! I've been focusing on NDX 1070 as the level (that's where we broke out from) but the trendline discovery needs to be mentioned as well. Similarly, the S&P has been flirting with the same trendline and it appears as if it's gonna breach it this morning. While technicals are only one of my three* trading metrics (fundies, psychology, technicals and sometimes structural), I've always found them to be a useful backdrop with which to trade.

The CS First Boston fete continues to rock with FLEX, NOK, LXK, KLAC, MERQ, TSM, ERTS, SUNW, SYMC, BEAS, MSFT, JDSU, MCHP, QCOM, BRCM and SAP (among others) telling their tale. We'll also be keeping our big ears to the ground as we listen for news out of the Banking, Retail and Chemical conferences today. Finally, and not to be forgotten, Mr. Beeks will be dropping by with factory orders (exp 1.7%) and the ISM non-manufacturing release (exp.54).

As far as our daily guides go, the semiconductors will be a focus today on the heels of the analyst blitz and in front of Intel's mid-quarter update tomorrow. The brokers will also tell a tale today as they traditionally trade "with" tech and they've acted relatively dry through this latest selloff. Peripheral tells include MSFT and CSCO (bellwethers), NOK (being pushed), the Retailers (consumer proxy), Halle Bonds and the saucy internals.

The bears took the ball on Monday's opening bell and have controlled the line of scrimmage ever since. With that said, there's a lot at stake (into year end) and the bulls won't go down without a fight. Look for Hoofy and his friends to toe the technical lines and make a stand-and may the best critter win. I walked into work today with both legs in my metaphorical bear costume (2 appendages, or 50% conviction on the short side) and I'll continue to "trade around" a short bias.

I've gotten a lot of feedback on the disclosure discussion and I want you know that I hear you and will circle back to this topic later. This column has always operated with the reader's best interest at heart and any decision that's made is consistent with that thought. Above all else, this community is built on trust and communication and we'll always try to do the right thing. The style of Minyanville is nice-but it's our hope that the substance will set us apart.

See you after the opening

R.P

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positions in:mwd, spx, ndx, aol, sox, klac, tsm, erts, csco, intc
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